NORTH Sea oil and gas firms could get tax refunds for their losses to help them cope with the challenges posed by the fallout from the coronavirus, an expert has suggested.
Derek Leith of accountancy giant EY said the UK Government should consider following the lead set in Norway where lawmakers are considering shaking up the tax system to help the industry cope with the recent slump in commodity prices.
Warning: 30,000 North Sea jobs could be lost amid oil price plunge triggered by coronavirus
He noted that changes proposed in Norway would allow companies to get cash tax refunds in respect of any trading losses incurred this year or in 2021.
Regarding the UK, Mr Leith said: “The ability to monetise current year trading losses would be very welcome, as currently normal trading losses can only be carried back one year, or carried forward.”
He said the reforms proposed in Norway reflected concern the slump in the oil price could have a lasting detrimental impact on the sector in the country without some sort of fiscal response.
Do big North Sea firms deserve to get special treatment from taxpayer?
Industry body Oil & Gas UK has said the supply chain in the North Sea is at breaking point.
It has called on the UK government to do more to help firms cope with the cash flow pressures resulting from the oil price fall and to work with the industry to develop proposals to support a recovery.
Oil & Gas UK yesterday welcomed the Scottish Government’s decision to launch a Strategic Leadership Group to help it develop measures to support the sector.
Shell finance chief hails potential of bumper Shetland field after oil giant slashes dividend
The group will be chaired by energy minister Paul Wheelhouse and include representatives from industry and regulatory organisations, trades unions and supply chain companies.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here